When stuff gets in the way of investing

SHARE | Wednesday, 01 July 2015 | By Nelson Letshwene

Most people would like to have lots of money, both now and in the future. The only thing that gets in the way of investing is stuff. Many people, even people who make lots of money, spend a lot of it on stuff. The stuff of life seem so urgent in the present time, and yet when you look back at stuff that you bought last year, it seems very useless now. There is however new demand for new stuff right now.

A farmer, who does not plant a seed in summer, cannot show up at harvest time and expect a bountiful harvest. Think about it this way: everyone is going towards retirement age. If that age is sixty, you have to subtract your current age from that number and see how many years are left towards that inevitable goal. You then have to work with the remaining number of years to turn your situation around, if it was not well directed.

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Most people get to their retirement only with forced investments. They were forced by their employer to contribute a certain amount towards their pension fund. They did it grudgingly for all these years and therefore did not really intentionally wish to grow it. They have some equity in their home because the bank forced them to pay the mortgage every month. If they are lucky, they also have some insurance policy that will happen to mature around their retirement time.

The problem with the equity in their home is that the only way to get it is to sell the house and downgrade to a smaller house, and live on the balance. Other people, unfortunately, try to mortgage their home, and use their pension pay out to continue to pay off the mortgage installments. They eventually lose the hose to the bank.

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Financial discipline dictates that you should always keep your eye on the future. By not starting your investment programs early, you are losing out on the power of compound interest. Even if you make a big deal on the eve of your retirement, that money will not have the opportunity to grow through the power of compound interest.

To give your money a chance to grow, you need to learn to put a little aside habitually every month. Paying yourself first needs to be a very important habit that you develop. An active investor is one who is not distracted by stuff of today. An active investor is not a forced investor. They deliberately think about their investments and they make sure that on a continual basis, they are adding something to their future.

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An active investor knows how to utilise their financial planner. They don’t rely on forced savings. They have a plan that they are following very closely. They don’t take a backseat approach to their investments. They look beyond their home equity and their traditional pension program.

In this day and age, no one can afford to take the backseat approach to their future. You need a financial planner and advisor. You need to be looking at a financial plan that talks to your specific needs. The one valuable thing that people loose towards their retirement age is time. Any month that goes by without a premium paid to your future, is time lost, and therefore money lost. To your success! Follow us on www.thegoldenruleblog.wordpress.com or follow me on twitter @101silverline